For years, the Euro-Finance Ministers struggle for far-reaching reforms in the monetary Union. On the big issues, it is hardly. Now the Department heads present a minimal compromise.
In a good mood at the Meeting of the Minister of Finance
The Eurozone Finance Ministers have agreed on steps to strengthen the currency Union against future crises. “We have a Deal,” said a spokesman for Euro-groups-chief Mario Centeno on Tuesday morning after 16 hours of negotiations in Brussels. In the core from the Euro bailout Fund ESM should be strengthened. In the Euro-zone Budget and to the joint guarantee system for savings deposits, the debates continue.
“We have made … no big steps forward,” said EU economy Commissioner Pierre Moscovici after the Meeting of the Euro-round. Federal Finance Minister Olaf Scholz (SPD) spoke on the short-messaging service Twitter from a good result: “The Euro reform decisive steps.”
The EU States apart from the United Kingdom, which will leave the community expected in the coming year – have been discussing for some time about reform in the currency Union. The reason is that the severe financial crisis, Europe was hit especially from 2010 onwards, largely unprepared.
Consensus only at the ESM
The President of France, Emmanuel Macron, and the EU-Commission had wide-ranging ideas for a Euro zone budget, a EU Finance Ministers and to the Expansion of the Euro bailout mechanism, the ESM into a European monetary Fund. Most of it is still future music, but now there are at least first steps.
The ESM, which may yet be forgiven especially loans to States in Need, should, in the future, can also intervene earlier. It will also be jointly involved with the EU-Commission in the Management of aid programmes. This is to ensure that debt of a country to remain viable. This means that you can realistically be paid back.
In the past – for example, in the case of the rescue packages for Greece – the International monetary Fund (IMF) a Central role. Between the IMF and the Europeans there were, however, especially in the question of guilt reviews and some significant differences. In addition, the ESM is also to be used as a so-called backstop to the European resolution Fund the SRF. In the SRF of the banks, to pay to itself, until the year 2024, approximately 55 billion Euro are to be provided. The resolution should be overwhelmed mechanism, however, could fill in the ESM. “In order for the Bank resolution Fund gets the firepower for big problems,” said ESM chief Klaus Regling.
Germany’s Finance Minister and Vice-Chancellor Olaf Scholz (m.)
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The last backup should be before the year 2024, provided that there is further progress in the reduction of risks in the banking sector. This includes, among other things, the failure would have to be reduced vulnerable (rotten) loans in the balance sheets.
Many open questions
Open issues there are still with the introduction of a Eurozone budget within the total EU budget. To such advance have been agreed by Germany and France. Thus, economic differences between the States could be reduced, and investment and structural reforms promoted.
The EU heads of state and heads of government could. now, at their summit on 13 and 14. December in Brussels a mandate for further negotiations, grant, said Euro group chief Centeno. Details – such as the financial volume of such a budget – are still open.
In the EU Commission 2015 proposed introduction of a common Deposit guarantee system for banks, there was hardly any progress. A working group should now explore the options, it said. Especially in Germany there is a concern, as long as risks are not reduced in the banks of other countries. Financial institutions in this country are afraid to have in the event of a crisis.
stu,tko/yy (afp, dpa, rtr)